[contentblock id=46 img=html.png]

Most problems are dealt with in superficial ways.  Very few people and organizations actually arrive at the root cause of their problems.  At Toyota, they employ Root Cause analysis in almost everything they do.  One problem solving approach they employ is the Lean A3 Problem Solving Method.

A3 is a paper size, typically 11″ x 17″.  There are actually several A3-type paper sizes, and Toyota believes that when you structure your problem solving around 1 page of paper, then your thinking is focused and structured.

Below are the steps of the A3 process, followed by a real-world example of an A3 collaborative problem solving that I was a part of while I spent a short time at Toyota.  The steps below are taken from Dr. Durward Sobek’s very informative site [1. http://www.montana.edu/dsobek/a3/]:

Identify Problem or Need

Whenever the way work happens is not ideal, or when a goal or objective is not being met, you have a problem (or, if you prefer, a need). The best problems to work on are those that arise in day-to-day work and prevent you from doing your best.

Understand Current Situation

Before a problem can be properly addressed, one must have a firm grasp of the current situation. To do this, Toyota suggests that problem-solvers:

• Observe the work process first hand, and document observations
• Create a diagram that shows how the work is done – a value stream map will be helpful here.
• Quantify the magnitude of the problem (e.g., % of customer deliveries that are late, # of stock outs in a month, # of errors reported per quarter, % of work time that is value-added); if possible, represent the data graphically.

Root Cause Analysis

Once you have a good understanding of how the process (i.e., the one that needs to be fixed) currently works, it’s time to figure out what the root causes are to the errors or inefficiency. To accomplish this, first make a list of the main problem(s). Next, ask the appropriate why? questions until you reach the root cause. A good rule-of-thumb is that you haven’t reached the root cause until you’ve asked why? at least five times in series.

Main Components of an Ishikawa Diagram

1. At the head of the Fishbone is the defect or effect, stated in the form of a question.
2. The major bones are the capstones, or main groupings of causes.
3. The minor bones are detailed items under each capstone.
4. There are common capstones, but they may or may not apply to your specific problem. The common ones are:

• People
• Equipment
• Material
• Information
• Methods/Procedures
• Measurement
• Environment

After completing your Fishbone Diagram excercise as a group, it is helpful to test your logic by working the bones: top-down OR bottom-up like:

this happens because of g; g happens because of f; f happens because of e; e happens because of d; d happens because of c; c happens because of b; b happens because of a.

The excercise above is crucially important ” you must test your logic so that it makes pragmatic sense and that the atomic root cause is actionable ” that is, you can do something to correct it, reduce it, or eliminate the root cause.

Once you or your team arrive at a root cause for a specific capstone, then you typically cloud it to identify it as a root cause. A good rule is that there is typically *NOT* 1 root cause for a problem, but potentially several. Below is a diagram of one fishbone, decomposed:

Countermeasures

Once the current situation is fully understood and the root cause(s) for the main problem(s) has been unveiled, it’s time to devise some countermeasures. Countermeasures are the changes to be made to the work processes that will move the organization closer to ideal, or make the process more efficient, by addressing root causes. Generally speaking, we recommend that countermeasures help the process conform to three rules borrowed from Steven Spear and Kent Bowen and slightly expanded:

• Specify the outcome, content, sequence, and task of work activities
• Create clear, direct connections between requestors and suppliers of goods and services.
• Eliminate loops, workarounds, and delays

Develop the Target State

The countermeasure(s) addressing the root cause(s) of the problem will lead to new ways of getting the work done, what we call the target condition or target state. It describes how the work will get done with the proposed countermeasures in place. In the A3 report, the target condition should be a diagram (similar to the current condition) that illustrates how the new proposed process will work. The specific countermeasures should be noted or listed, and the expected improvement should be predicted specifically and quantitatively.

Implementation Plan

In order to reach the target state, one needs a well thought-out and workable implementation plan. The implementation plan should include a list of the actions that need to be done to get the countermeasures in place and realize the target condition, along with the individual responsible for each task and a due date. Other relevant items, such as cost, may also be added.

A3 Example

Below is an example from an A3 project.  The context for the A3 Report below is around the question “Why was the end-of-shift clean-up not being completed?”  This question drove the team to follow the A3 method and subsequent root cause analysis to arrive at the root causes and implement solutions.  This activity below was done proactively done by the team with full support from management.

The post Toyota A3 Report Example [video] appeared first on 6sigma.

Below are some data collection heuristics:

In 1993, Bain launched a multi-year research project to get the facts about management tools and trends. Our objective is two-fold:

• To provide managers with information they need to identify and integrate tools that will improve bottom-line results
• To understand how global executives view their strategic challenges and priorities

Over the past 14 years, we have completed 11 surveys, assembling a database that now includes 8,504 respondents from more than 70 countries in North America, Europe, Asia, Africa, the Middle East and Latin America.  This year, we received 1221 completed surveys from a broad range of international executives.  We also conducted personal follow-up interviews to further probe the circumstances under which tools are most likely to produce desired results.

This year, we focused on 25 of the most popular tools and techniques, listed on the slide below. To qualify for inclusion, a tool had to be:

• Relevant to senior management
• Topical (as evidenced by coverage in the business press)
• Measurable

Perception and Satisfaction of Lean Manufacturing

Below is Bain’s explanation of Lean Manufacturing:

Lean Operations is both a methodology and philosophy that focuses on eliminating waste and reducing the time between a customer’s order and delivery. By trimming waste, companies — manufacturers of goods and providers of services alike — can achieve higher quality, increased productivity, improved customer interactions and speed. The goal of Lean Operations is to get the right things to the right place, at the right time, in the right quantities, while minimizing waste. The Lean concept was pioneered by Toyota founder, Taiichi Ohno, as a much faster, better and less-expensive way of producing vehicles. Lean Operations redefines waste as anything the customer won’t pay for — everything from clerical errors to idle machine operators.  The process identifies seven types of waste:

• Waiting”for products, personnel, parts, the availability of machines;
• Transportation time”for equipment and parts needed for repairs;
• Processes”duplicate data entry, inefficient stocking;
• Excessive inventory;
• Unnecessary motion by people and machines;
• Overproduction;
• Correction of defects or service errors.

There are three key elements in Lean Operations:

1. ensuring that the product flows through production without interruption;
2. systems that replenish supplies and products in response to customer demand;
3. and a culture that strives for both excellence and continuous improvement.

Five basic steps are used to improve the process flow:

• Identify activities that create value;
• Determine the major steps to deliver that value;
• Eliminate activities that do not add value;
• Ensure that products are available when consumers want them;
• Continuously improve processes.

While the Lean approach originally was designed for manufacturers, a broad range of industries now use the Lean concept to improve both operations and customers’ experience by:

• Spending less on equipment;
• Redesigning factories, stores and processes to increase efficiency of workers and machines;
• Reducing the number of workers needed to accomplish a task;
• Increasing efficiency of inventory stocking and replenishing;
• Improving customer service;
• Creating varied store formats;
• Developing branding — win customers by having cheaper prices, faster service or wider product selection.

Given the data heuristics and Bain’s definition of lean, below are some highlights on the satisfaction scores — or, executives satisfaction and perception of Lean:

• Globally, 2006 usage is 54% and 2006 overall satisfaction is (3.73 / 4.0), below of global satisfaction mean of 3.75.
• Lean is used by companies with revenues ranging from (< $600M to > $2B).
• In North America, 59% reported using Lean as a tool or methodology, 52% in Europe, 33% in Latin America, and 56% in Asia.
• Defection Rate: Defection is a measurement of loyalty, which shows the percentage that stopped using the tool in 2006 after using it at least once in the past five years.  The global average defection rate was 5.7%.  Defection of Lean is 2%, well below the global defection average.

Perception and Satisfaction of Six Sigma

Below is Bain’s explanation of Six Sigma:

Sigma is a measure of statistical variation. Six Sigma indicates near perfection and is a rigorous operating methodology aimed to ensure complete customer satisfaction by ingraining a culture of excellence, responsiveness and accountability within an organization. Specifically, it requires the delivery of defect-free products or services 99.9997 percent of the time. That means that out of a million products or service experiences, only 3 would fail to meet the customer’s expectations. (The average company runs at around Three Sigma, or 66,800 errors per million.)

To raise operations and product designs to the highest benchmark, Six Sigma programs constantly measure and analyze data on the variables in any process, then use statistical techniques to understand what improvements will drive down defects.  Such programs also incorporate a strong system for gathering customer feedback. Companies have applied Six Sigma to functions ranging from manufacturing to call centers to collections.  Some companies estimate that the Six Sigma methodology has helped them realize savings upwards of $1 billion.

Six Sigma entails five key steps:

1. Define. Identify the customer requirements, clarify the problem and set goals;
2. Measure. Select what needs to be measured, identify information sources and gather data;
3. Analyze. Develop hypotheses, identify the key variablesand root causes;
4. Improve. Generate solutions and put them into action, either modifying existing processes or developing new ones.  Quantify costs and benefits;
5. Control. Develop monitoring processes for continued high-quality performance.

Companies use Six Sigma to set performance goals for the entire organization and mobilize teams and individuals to achieve dramatic improvements in existing processes.  More specifically, Six Sigma can:

• Make processes more rigorous by using hard, timely data, not opinions or gut feeling, to make operating decisions;
• Cultivate customer loyalty by delivering superior value;
• Strengthen and reward teamwork by aligning employees around complex processes whose performance can still be easily, clearly and empirically measured;
• Accustom managers to operating in a fast-moving internal business environment that increasingly mirrors marketplace conditions outside the company;
• Achieve quantum leaps in product performance;
• Reduce variation in service processes, such as the time from order to delivery, or offering a consistent, high-quality service experience;
• Improve financial performance, through cost savings from projects, increased revenue from improved products and expanded operating margins.

Here are the satisfaction highlights:

• In 2006, global usage was 40%, and a satisfaction rating of (3.66 / 4.0), below the global satisfaction mean of 3.75.
• Six Sigma is used by companies with revenues ranging from (< $600M to > $2B).
• 2006 usage: North America, 40%; Europe, 28%; Asia, 48%; Latin America, 30%.
• Defection Rate: Defection is a measurement of loyalty, which shows the percentage that stopped using the tool in 2006 after using it at least once in the past five years.  The global average defection rate was 5.7%.  Defection of Six Sigma is 6%, above the global defection average.

Below is a chart showing the tools surveyed and the satisfaction scores:

Here is a peception map, showing Usage against Satisfaction Rates:

Conclusion

If we find the integrity of Bain’s data to be sufficiently strong, then it’s clear that Six Sigma is losing favor in both usage and satisfaction.  A 2006 defection rate of 6% (above the defection mean) and a satisfaction score of 3.66, (below the mean) is emerging evidence that executives from different industries and company sizes have a declining perception of Six Sigma.

On Lean, defection is at 2%, below the mean and satisfaction is slightly below the mean 3.73 (mean is 3.75).

For me, the data shows the propensity for companies to tout “flavor-of-the-day” tools, methodologies, and initiatives that likely be abandoned at a later time, as evidenced by the mean defection rate.

What does this mean for those of us who are practitioners and supporters of Lean and Six Sigma?  I believe to increase satisfaction, we must show results.  It is ridiculous and not pragmatic to hold Lean or Six Sigma at a religious status, as some might be accused of doing.  Tool, method, or system fanaticism to the side, we must show results.

At the end of the day, executives and others will judge a methodology or tool or system by what it has done for them and for the firm.  True, Lean is a system that must be practiced as a system in order to wholly benefit from it.  For companies not mature or ready to fully understand that concept, it might make sense to slowly immerse them in Lean, and that might be done tool by tool, method by method; not as a whole system immediately.  Similarly for Six Sigma.

Results.  Lean and Six Sigma must show results.  How has the firm saved money, time, or resources?  How has the firm opened new markets and increased revenue?  Is the customer more delighted than she once was post implementation of Lean or Six Sigma?  We must keep our eye on showing and demonstrating results that are beneficial to the firm.  That is the only way satisfaction rates will recover from their declining trajectory.

Data Source: Bain Management and Tools 2007 Survey

The post Six Sigma, Lean, and Executive Satisfaction appeared first on 6sigma.

One uncommon approach in Lean is the framework of ECRS – Eliminate, Combine, Rearrange, and Simplify. This article explains how to apply the framework followed by a downloadable Work Analysis Template.

Fundamental to understanding any process and eventually generating practical ideas for improvement is to ask the 5W’s and 1H. So, here’s the definition of the 5W and 1H.

What are the 5W?

Put simply, the 5W’s are:

• Why?
• What?
• Where?
• When?
• Who?

For example:

• Who is responsible for this process?
• What is the purpose of this process?
• Why do you do that?
• When does x happen?

What is the 1H?

Of course, it is:

• How?

Such as “How is that done?”

These questions, while seemingly simple, are critical to better understanding the process and also the potential opportunities for improvement.

What is ECRS?

In generating practical ideas for improvement, a common and practical framework I’ve used in the past is called ECRS, which stands for the following:

• Eliminate
• Combine
• Rearrange
• Simplify

Eliminate

In this step, it’s important to identify the steps that can be quickly eliminated. Where possible, eliminate the details of work.

Combine

When work cannot be eliminated, then seek to combine them. In this step, the Combine phase addresses the Who, Where, and When.

Rearrange

Work can also be rearranged.

Simplify

And, a good rule of thumb regardless of the situation is to simplify anyway. Of course, we want to Eliminate first but, if not, then Combine, Rearrange, and Simplify will be helpful.

The template below shows the following:

1. Work Element
2. Safety, Distance, Dimension, Quality, Ease
3. Why, What, Where, When, Who, How
4. Improvement Ideas
5. Eliminate, Combine, Rearrange, and Simplify

So, today see how you might be able to apply this simple approach to better understanding your process and in how to improve your processes. Go here to see a video explanation and a free Eliminate Combine Rearrange Simplify Template Download.

The post Eliminate, Combine, Rearrange, Simplify: Work Analysis Sheet Template Download appeared first on 6sigma.

Creating a culture of excellence requires systems that are inclusive of all employees. Indeed, Respect for People must make its way into formal and informal systems within an organization. One formal way demonstrate the Respect for People principle is to have a formal and effective Employee Suggestion Program.

One critical item in that suggestion program is the actual creation of the suggestion form – the venue by which the employee will submit her idea for continuous improvement. And, you can also download a FREE Suggestion Program Template here.

Creating a channel by which employees can submit their ideas for improvement is a cultural enabler of continuous improvement. Put plainly, it’s a formal system that the organization can use to solicit ideas and listen to the thoughts and concerns of employees.

Making this form is both a science and art form. We must design the form to accomplish the following:

1. The format of the submission card must encourage critical thinking and reflection – not just a complaint.
2. The format of the submission card must be self-selective; that is, the submitter must put in some work, resulting in fewer submissions, but the submissions will likely be of higher quality.
3. The format must be easy to understand and quick to complete.

Here’s one example of an Employee Suggestion Program Card:

This 3×5 Index Card has the following sections:

1. Name
2. Submission Date
3. Safety, Quality, Productivity, and Costs (SQDC)
4. Describe the Problem
5. 5 Whys and Root Cause Analysis
6. Countermeasure (your idea for a solution here)

Notice that all of this is on a 3×5 card – and, yes, it is effectively a Mini A3 Problem Solving Form.

Also notice how much work the submitter has to go through to be able to place a card in the box? The thinking involved in completing a card is the manifestation of Respect for People. Why? – now we are moving from a complaint box to a Employee Thinking System. Encouraging employees to think in this simple but systematic way drives involvement and excellence.

How to Create an Employee Suggestion Card

Here are the steps:

1. Buy Avery 3×5 Blank Index Cards
2. Go here to get an employee suggestion program template free download.

And that’s it.

Next in this Employee Suggestion Program series, we’ll look at the metrics necessary to measure and hold accountable the program.

The post How to Create the Idea Submission Form appeared first on 6sigma.

We are pleased to bring you the second part of Cornelio Abellanas’ first article on modeling the impact of variability on systems and processes. In the first article, Cornelio showed the impact of variability, in general, on processes as it relates to lead time, cycle time, work in process (WIP), and the impact to the customer. In this article, he applies the same approach, but with a focus on Just in Time Logistics. You can also view all 40+ articles on Queueing Theory.

Enjoy this article and learn more about Cornelio at the end of this article.

In the previous article we saw some effects of variability: accumulation of WIP before and after the high variability step and overall Lead Time increase.

In a situation like this we might decide to apply Just-In-Time Inventory in order to reduce the excess inventory and in this way reduce Lead Time. We can try this with the Monte Carlo Simulator.

We first reproduce the previous situation:

• Variation of step 2 = 40 and run for a while to reach stability and then apply JIT in the whole line by limiting Max queue in all steps to 200 (double the throughput of 100). This means that we are adding a constraint: each step will only process if there is room to store its output (output WIP + processed in next step ≤ 200).

Analyzing the results we see we have achieved our objective of reducing excess WIP and Lead Time but have caused a bigger problem: Customer dissatisfaction due to a decrease in % On Time and average Thruput.

By doing this we eventually eliminate the excess WIP which had accumulated before and after the high variability step (2). The elimination of the excess WIP After removes the protection it was providing to customer deliveries and therefore % On time drops: the customer is dissatisfied.

Another consequence of this action is that thruput drops in every single step to around 90% of capacity. Notice that all this is due to the variability in step 2 combined with the application of JIT in the line.

This drop in thruput starts in step 2 due to the fact that although its theoretical capacity is between 60 and 140, due to the JIT restriction, it will never receive more than 100 units from the previous step and will not be allowed to supply more than 100 to the next step this makes the effective capacity to vary from 60 to 100. Therefore this step has become a bottleneck for the whole line which explains why all steps downstream from 2 will be equally restricted.

The amazing fact is that also the steps upstream are restricted by this bottleneck in step 2. The reason is that when step 2 processes only 60 units it leaves only 60 holes in the input buffer which allows the previous step to process only 60 units.

So this variability bottleneck, combined with JIT, degrades the productivity of the whole line: both upstream and downstream.

Imagine you go to the line in this situation: the cause of the problem will not be evident. If you try to convince step 2 that it is causing a problem to the whole line the reply might be: Why do you say that? I am producing on average like everyone else!

This is again the Virus of variability at work.

By applying JIT in this case we have therefore exposed the customer to all the variability of step 2 and dropped the productivity of the complete line: a complete disaster!

Maybe you can work out alternative solutions to reduce WIP in this case of high variability and propose them in your comments.

About Cornelio Abellanas

Has a PhD in Telecommunications Engineering degree from the University of Madrid and a Master of Science from the University of Kent at Canterbury (UK). He is a Lean Six Sigma Black Belt and EFQM (European Foundation for Quality Management) assessor.

He has been Lean Six Sigma manager and a member of the Management Committee in Celestica Spain where he implemented 80 improvement projects per year with a total savings for the Company of 1% of the yearly revenue. Improvement projects yielded these savings by reducing operator time, optimising plant layouts, reducing equipment setup time, reducing admin and production lead times, increasing equipment availability, reducing operator and equipment defect rate, reducing work-in-process and component inventory, reducing scrap and rework, improving on-time delivery, etc.

He designed and implemented a line data collection system and real-time operator feedback which enabled self control in autonomous electronic board production cells.
He performed internal audits and achieved success in external audits for the Company with standards ISO 9000: 2000, AS9100 (Aerospace), ISO/TS 16949 (Automotive) and ISO 13485 (electro-medicine). He has developed and maintained the Quality System: Quality Manual, Process Value Stream Maps, Procedures, Corrective actions, Suggestion program, etc. for Celestica Spain. He has delivered EFQM training and assessment in companies Volvo Truck and Guzman.

He currently delivers Lean and Six Sigma training and leads Kaizen workshops in companies around Europe: IBM, AT&T, MSL, Philips, Volvo Truck, Ford, Celestica, IBC, Pt Pro, BP Solar, Italgres, PCS, General Dynamics, Telefónica International Wholesale Services, EMT Valencia, Importaco, Faurecia, Asac Pharma, etc. in France, Spain, Portugal, Belgium, Netherlands, Germany, Austria, Italy, Ireland, Greece, Switzerland, Sweden, etc.

He lectures at MBAs in local Universities.

He has managed and delivered courses at the IBM International Education Center in La Hulpe, Belgium on the topics: Total Quality Management, ISO 9000, EFQM, Stress Screening, Six Sigma, Statistical Process Control and Capability, Design of Experiments, Design for Manufacturability, Business Process Improvement, Lean Production, Kaizen, Theory of Constraints, etc.

He managed an Independent Business Unit which was responsible for production of a tape drive unit designed in IBM Tucson, USA and manufactured in a local IBM Spain subcontractor. He was Manufacturing Engineering Manager for banking control units in IBM Spain. He designed a matrix ticket printer for British Railways in Ventek Ltd., London (Datapoint Computers representative for UK). He worked as a Systems Engineer in logic design for Burroughs Machines Ltd. (now Unisys) in Cumbernauld (Scotland).

Contact information:
Polyhedrika CB
Valdelinares 2, 11a
46015 VALENCIA (Spain)
Mobile: (34) 678464624

The post Just in Time Simulation Using Monte Carlo Methods appeared first on 6sigma.

Enjoy this article and learn more about Cornelio at the end of this article.

The purpose of Lean is the elimination of waste while Six Sigma is centered in the reduction of variability. One of the forms of waste we try to eliminate with Lean is excess inventory and particularly Work-In-Process which is responsible for long lead times and poor customer responsiveness.

Variability was described by Myron Trybus as a virus which infects our processes: it causes chaos and is often undetected. Variability is in fact often the root cause of our problems and Six Sigma allows us to detect it and reduce it at the source.

The best way to understand the effects of variability is by using a Monte Carlo simulator. In my teaching I use a simple 3 step process simulator in Excel (shown above) to let participants experience for themselves the effects of variation, try different solutions to the problems presented and see the side effects by downloading the monte carlo simulation yourself.

We want to see the effects of variation in one step on the total process. To do that we first run the simulator for a while by pressing start and see what the ideal process would look like: 100 items committed and delivered to the customer on every period with an average WIP per step of 100 and average lead time of 1.

Now let us key in a variation of 40 in step 2 (random variation of thruput between 60 and 140 with an average of 100). When we run the first thing we experience is customer dissatisfaction due to missed deliveries (% On time drops).

Eventually some WIP starts accumulating before and after step 2 (the one causing the problem). If we continue we will see WIP moving between Before and After step 2. When the excess WIP is After it protects the customer from the variability so % On time recovers to 100% but when the excess WIP moves to Before we start missing deliveries again.

In the graph in the bottom we can see the evolution of average lead time (which is related to total WIP) as well as the instances of missed deliveries. The first thing we notice, as a direct consequence of variability is an increase of WIP which in turn causes longer lead times. The virus effect of variability can also be noticed when we look at the average thruput of step 2: it is still the same as that of the other steps, therefore it is not obvious where the problem is coming from. We can also see that on some occasions the excess WIP accumulates AFTER step 2 and this can mislead us to blame step 3 (it has the big pile in front of it).

This result confirms that unless we measure variability we will not improve it (Six Sigma) and the effects of variability is excess WIP and long lead time (Waste).

In an upcoming article, we will later experience the simulation will show when we apply just in time (JIT) to the model.

About Cornelio Abellanas

Has a PhD in Telecommunications Engineering degree from the University of Madrid and a Master of Science from the University of Kent at Canterbury (UK). He is a Lean Six Sigma Black Belt and EFQM (European Foundation for Quality Management) assessor.

He has been Lean Six Sigma manager and a member of the Management Committee in Celestica Spain where he implemented 80 improvement projects per year with a total savings for the Company of 1% of the yearly revenue. Improvement projects yielded these savings by reducing operator time, optimising plant layouts, reducing equipment setup time, reducing admin and production lead times, increasing equipment availability, reducing operator and equipment defect rate, reducing work-in-process and component inventory, reducing scrap and rework, improving on-time delivery, etc.

He designed and implemented a line data collection system and real-time operator feedback which enabled self control in autonomous electronic board production cells.
He performed internal audits and achieved success in external audits for the Company with standards ISO 9000: 2000, AS9100 (Aerospace), ISO/TS 16949 (Automotive) and ISO 13485 (electro-medicine). He has developed and maintained the Quality System: Quality Manual, Process Value Stream Maps, Procedures, Corrective actions, Suggestion program, etc. for Celestica Spain. He has delivered EFQM training and assessment in companies Volvo Truck and Guzman.

He currently delivers Lean and Six Sigma training and leads Kaizen workshops in companies around Europe: IBM, AT&T, MSL, Philips, Volvo Truck, Ford, Celestica, IBC, Pt Pro, BP Solar, Italgres, PCS, General Dynamics, Telefónica International Wholesale Services, EMT Valencia, Importaco, Faurecia, Asac Pharma, etc. in France, Spain, Portugal, Belgium, Netherlands, Germany, Austria, Italy, Ireland, Greece, Switzerland, Sweden, etc.

He lectures at MBAs in local Universities.

He has managed and delivered courses at the IBM International Education Center in La Hulpe, Belgium on the topics: Total Quality Management, ISO 9000, EFQM, Stress Screening, Six Sigma, Statistical Process Control and Capability, Design of Experiments, Design for Manufacturability, Business Process Improvement, Lean Production, Kaizen, Theory of Constraints, etc.

He managed an Independent Business Unit which was responsible for production of a tape drive unit designed in IBM Tucson, USA and manufactured in a local IBM Spain subcontractor. He was Manufacturing Engineering Manager for banking control units in IBM Spain. He designed a matrix ticket printer for British Railways in Ventek Ltd., London (Datapoint Computers representative for UK). He worked as a Systems Engineer in logic design for Burroughs Machines Ltd. (now Unisys) in Cumbernauld (Scotland).

Contact information:
Polyhedrika CB
Valdelinares 2, 11a
46015 VALENCIA (Spain)
Mobile: (34) 678464624

The post Monte Carlo Simulation Excel on Variability and Queueing appeared first on 6sigma.

Those involved in continuous improvement have one thing in common: our aim is to improve how things are done. That means that one common phenomena in processes is that there was a way of performing a task and a new way of performing a task. In any change process worth measuring, it’s important to determine through hypothesis testing whether there was a statistically significant change in the process. One common way to see if there was a statistically significant change in the process is to use the Paired T-Test.

When to Use a Paired T-Test

Suppose you run a call center. One metric most call centers monitor is Handle Time – or the total time a customer service representative is on the phone. Now, let’s assume you have 3 CSR’s and their average handle times were as follows:

• CSR1: 434 Seconds
• CSR2: 567 Seconds
• CSR3: 123 Seconds

Now, say you decide that the current process contains several steps that you consider to be waste; you identify those steps, and you make changes in the customer service process. After the change, those same CSR’s now have the following average handle times:

• CSR1: 987 Seconds
• CSR2: 276 Seconds
• CSR3: 877 Seconds

Null Hypothesis

But before you make any claims on the change process, it’s important to understand the Null Hypothesis in the case of a Paired T-Test.

For this example, our Null Hypothesis is that:

• There is no difference in the mean handle times before the process change and after the process change.

Looking only at the before and after results doesn’t guarantee that there was a statistically significant change in the process, however. We use the Paired T-Test for that.
Let’s use another example.

Order Fulfillment Picking Process Change

Picking is a process in Order Fulfillment. Now, suppose you manage the outbound department and Picking was a process you managed. Now, imagine that your pickers are measured by the Pick Rate, or the number of items picked per hour.

Because you are a diligent and motivated manager with skills in continuous improvement, you decide that as a team you would improve the picking process, with the hope of increasing Pick Rate with no change in labor. Below are the results of the process change:

In the table above, we have pick rates for the pickers before the process change and after the process change. We also calculate the mean and standard deviations before and after. Then, using excel, we simply do the standard calculations for a Paired T-Test, which gives us the results below:

The data shows that we can reject the Null Hypothesis. In other words, we can reasonably conclude that the process change resulted in a statistically significant change in the mean pick rates of the pickers before and after.

Paired T-Test Examples

There are many example in business where you could use the Paired T-Test. Here are just a few:

• New drug efficacy (pain before and after, weight before and after, etc.)
• Logistics – change in the mean time-in-transit from supplier to customer (change in route, trucker rest times, pedal acceleration, etc.)

Think about your processes. I’m sure you can think of a few examples on your own. Here, you can download the Paired T-Test Excel spreadsheet.

The post Is There a Difference: Using a Paired T Test To See Significance in a Change Process appeared first on 6sigma.

You can also download all 30 Value Stream Map Icons, which is part of the Lean Six Sigma templates.

A Value Stream Map is an incredibly useful tool that captures the following:

1. The Process and Process Owner
2. Value Add and Non Value Add steps
3. Number of People
4. Batch Size
5. Push or Pull
6. Cycle Time
7. Lead Time
8. Reword
9. Changeover Time
10. and much more . . .

To represent the above and other important elements in a process, there is a somewhat standard or common nomenclature of Value Stream Map Symbol. Below, you’ll see a video on how to read a Value Stream Map for a Software Development Process. Then, we show a table of all 30 Value Stream Map Icons and their definitions.

Process Symbols

 Material Symbols

Inventory	These icons show inventory between two processes. While mapping the current state, the amount of inventory can be approximated by a quick count, and that amount is noted beneath the triangle. If there is more than one inventory accumulation, use an icon for each. This icon also represents storage for raw materials and finished goods.
Shipments	This icon represents movement of raw materials from suppliers to the Receiving dock/s of the factory. Or, the movement of finished goods from the Shipping docks of the factory to the customers
Push Arrow	This icon represents the “pushing” of material from one process to the next process. Push means that a process produces something regardless of the immediate needs of the downstream process.
Supermarket	This is an inventory ‘supermarket” (kanban stockpoint). Like a supermarket, a small inventory is available and one or more downstream customers come to the supermarket to pick out what they need. The upstream workcenter then replenishes stocks as required. When continuous flow is impractical, and the upstream process must operate in batch mode, a supermarket reduces overproduction and limits total inventory.
Material Pull	Supermarkets connect to downstream processes with this “Pull” icon that indicates physical removal.
FIFO Lane	First-In-First-Out inventory. Use this icon when processes are connected with a FIFO system that limits input. An accumulating roller conveyor is an example. Record the maximum possible inventory.
Safety Stock	This icon represents an inventory “hedge” (or safety stock) against problems such as downtime, to protect the system against sudden fluctuations in customer orders or system failures. Notice that the icon is closed on all sides. It is intended as a temporary, not a permanent storage of stock; thus; there should be a clearly-stated management policy on when such inventory should be used.
External Shipment	Shipments from suppliers or to customers using external transport.

Information Symbols

Production Control	This box represents a central production scheduling or control department, person or operation.
Manual Info	A straight, thin arrow shows general flow of information from memos, reports, or conversation. Frequency and other notes may be relevant.
Electronic Info	This wiggle arrow represents electronic flow such as electronic data interchange (EDI), the Internet, Intranets, LANs (local area network), WANs (wide area network). You may indicate the frequency of information/data interchange, the type of media used ex. fax, phone, etc. and the type of data exchanged.
Production Kanban	This icon triggers production of a pre-defined number of parts. It signals a supplying process to provide parts to a downstream process.
Withdrawal Kanban	This icon represents a card or device that instructs a material handler to transfer parts from a supermarket to the receiving process. The material handler (or operator) goes to the supermarket and withdraws the necessary items.
Signal Kanban	This icon is used whenever the on-hand inventory levels in the supermarket between two processes drops to a trigger or minimum point. When a Triangle Kanban arrives at a supplying process, it signals a changeover and production of a predetermined batch size of the part noted on the Kanban. It is also referred as “one-per-batch” kanban.
Kanban Post	A location where kanban signals reside for pickup. Often used with two-card systems to exchange withdrawal and production kanban.
Sequenced Pull	This icon represents a pull system that gives instruction to subassembly processes to produce a predetermined type and quantity of product, typically one unit, without using a supermarket.
Load Leveling	This icon is a tool to batch kanbans in order to level the production volume and mix over a period of time
MRP/ERP	Scheduling using MRP/ERP or other centralized systems.
Go See	Gathering of information through visual means.
Verbal Information	This icon represents verbal or personal information flow

General Symbols

[contentblock id=16 img=gcb.png]

The post Value Stream Map Symbols and Video appeared first on 6sigma.

A complement to a process map is what I’ve used in the past, which I call a Business Process Analysis Template. This template allows the us to highlight specific process steps, the type of activity, time, and distance involved in that process step.

The template above also allows us to highlight the specific wastes – one of the 7 wastes – that the process activity can be categorized as.

For example, suppose you are analyzing an emergency room (ER) or emergency department (ED) process. You analysis might look like this:

The post Business Process Analysis Template Download appeared first on 6sigma.

What is a Contingency Table

For something to be a root cause, the defect rate must be higher when root cause is present and the defect must be lower when this root cause absent. The easiest way to show this is to use 2×2 grid and look for patterns.

The data on the grid will make it very clear if what you are looking at is a root cause of the defect that you are after or not. The grid is constructed so that you have a box containing four other boxes (2×2).

On the rows, you add labels root cause present and root cause absent and across the columns, you label the columns defect present and defect absent. Then, you fill in the grid with data (numbers of observations).

You will have to go and look at some non-defective parts and see if your potential root cause is present or absent (you may already have data for your potential root cause from MEASURE, if not, you have to measure that too).

For a potential root cause to be considered verified by this tool, most of the data must be on the diagonal. This means that it will fall in the defect present/root cause present box and the defect absent/root cause absent box.

If it fits this pattern, then you can be confident that if you eliminate the root cause, then the defect will go away. If it does not fit this pattern, you can use more advanced Statistical Tests to verify the root causes.

As an example, let’s assume the following:

Defect: Packages in Order Fulfillment are rejected by the Packing Scanner

And, during our data collection phase in Measure, we have data that shows the data below:

Typically, they hypothesis takes the form of:

H₀: there is no relationship between dirty shipping labels and packing scanner rejections
H₁: there is a relationship between dirty labels and packing scanner rejections

Given the data above, we follow this intermediate equation:

Then, we follow the Chi-Square Equation:

Which gives us the results below:

Given the results above, we can conclude the following:

We Reject the Null Hypothesis

There are many possible applications of the contingency table. Think about your business, the defects that you deal with, and perhaps there might be an opportunity to apply the Chi-Square or Contingency Table to your process.

Click Here to download a Chi Square Calculator.

The post Lean Six Sigma: Contingency Table and Chi Square Test appeared first on 6sigma.

Most corporate strategy is really based on planning, with action later in the process. This classic approach isn’t conducive to lean or six sigma deployments, where the focus is really on action.

But there’s more: classic corporate strategy doesn’t address uncertainty very well and, for an organization new to lean six sigma, there’s significant uncertainty. The questions in the mind of the firms’ key people might be:

• Will this Lean Six Sigma thing work?
• Isn’t Lean Six Sigma pretty much common sense?
• Will investment in Lean Six Sigma pay off for us? Can we project what the Return on Investment for Lean Six Sigma training be?

And many other questions might be lurking in the minds’ of those in the organization and, it makes sense: after all, for a company new to lean six sigma, there’s uncertainty and there’s anxiety.

And, if lean six sigma is part of an overall corporate strategic effort, it must be dealt with within a framework that makes sense.

Portfolio of Initiatives

An alternative to the classic corporate strategic approach, which is primarily based on planning – not action – is the Portfolio of Initiatives [1. http://www.mckinseyquarterly.com/Enduring_Ideas_Portfolio_of_initiatives_2446].

The main idea behind the Portfolio of Initiatives approach is that each strategy is embedded in each initiative and, hence, is based on action.

The Initiatives are the Action

It is also done within the framework of the 3 general business horizons relative to the market: familiarity, certainty, uncertainty – also, it is flexible and makes room for adjustment, not a simple go or no go decision making and when it’s all “go”, there’s no stopping the initiative.

The portfolio of initiatives also addresses all the actions corporations take within strategy: acquisitions, divestitures, changing the organization, organic growth, changing business model – in sum, any type of initiative that impacts the firm corporate wide.

click on the image for a larger view

The vertical axis represents the 3 business horizons of Familiar, Unfamiliar, and Uncertain. The horizontal axis shows time from 1-2 years to 3+ years based on “meet current earnings”, “create medium term growth”, and “generate portfolio of high return options”.

The bubles in the chart represent the initiative and the size of the bubble shows how large or small the impact the initiative will have on the labels on the horizontal axis and whether the initiative is uncertain, unfamiliar, or familiar on the vertical axis.

The Shape of the Bubbles Reveals Focus

The shape the initiatives take matters. The chart above shows a balanced approach to strategy. But, the examples below and their corresponding shapes tell a different picture:

click on the image for a larger view

Notice that the shape of the bubbles indicates the level of focus the company’s strategy or organization has – the shape can go from balanced to no focus, risk averse, very risky, no short term growth, only long term growth, or short term focus.

Once all the initiatives are on one piece of paper, then trade-offs can be made on whether the firm is biased toward any specific “pattern” and then the firm can course correct.

Portfolio of Initiatives and Lean Six Sigma

Ive used the Portfolio of Initiatives many times in the deployments that I’ve been involved in; when a Lean or Six Sigma deployment is viewed in the larger context of the organization and the other initiatives, I’ve found that helps stakeholders have more comfort in knowing how a lean six sigma deployment will help the firm and also when.

And, since Lean Six Sigma deployment is only one bubble among many, it takes off undue burden and weight that often comes in any change initiative.

The post Portfolio of Initiatives: A Lean Six Sigma Strategic Approach appeared first on 6sigma.